Investor Confidence in Retail Sector Plummets

Wednesday, March 10th, 2010 - Wholesale Investor

Latest Quarterly Wholesale Investor National Survey reveals a lack of confidence in the traditional retail sector with only 3.2% of investors believing the sector will experience significant growth in 2010.

Statistics from the March edition of the survey, released today, show High Net Worth, sophisticated investors believe the sectors that will experience the most growth in 2010 are Greentech (44.2%), Mining (41.1%), Property (32.6%), Internet/IT (29.5%), Financial Services (26.3%) and Healthcare (21.1%). The inclusion of Internet/IT in the top 5 reflects a greater shift from traditional business to online markets, particularly for the retail sector.

The survey also reveals that these investors are more optimistic, have more money and have invested into a wide range of sectors over the last three months.

The survey was conducted by Wholesale Investor magazine on the registered database of 5,450 high net worth, wholesale, professional and international investors. Full details of the survey can be obtained by going to http://www.wholesaleinvestor.com.au

KEY POINTS OF THE SURVEY:• The sectors which have received the most funding from investors over the past 12 months are: Financial Services; Property; Internet/IT; Greentech and Mining.• Sectors that investors are seeking to invest into right now: Greentech, Mining, Property, Internet Financial Services and Healthcare• Investors are currently seeking exposure to Private companies (68.4%) and Pre-IPO opportunities (55.8%)• Private investors are selective - 64.2% of investors review between 10 and 30 opportunities before they invest in one – but not to the extent of Venture Capitals who review over 30 deals before investing into 1 (AVCAL,2009)• Investors are highly active right now – 60% are currently invested into 3 or more investments• Investor confidence in the market is currently very high - 94.8% of investors believe now is a good time to invest; 23.2% believe now is the best market they have ever seen and are seeking investments right now.• Funds continue to be deployed into investments - less than 21.2% have 50% or more of their funds in cash compared with 79% in May 09.• Entrepreneurs need to improve their skills and knowledge in the areas of valuations, financial projections, management expertise and exit.• Investors are still mostly focussed on making direct investments into ordinary equity.• 48.4% of investors have a portfolio valued at between $500k and $10million• 66.3% of investors have a net worth of over $1million; 25.3% are worth more than $5 Million

This survey gives an in-depth insight into specifically what investors are seeking when making investment decisions and deploying capital. This greatly assists companies and entrepreneurs to shape their investment offers, greatly increasing their chance to raise capital.

Key points for Entrepreneurs seeking capital:• Entrepreneurs need to improve their skills and knowledge in the areas of valuations, financial projections, management expertise and exit.• Pitching is a numbers game. If investors only invest after looking at between 10 and 30 deals, Entrepreneurs need to get their deal in front of as many investors as possible.

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